General Trading Chat

[Smart_trade]

ST will it affect intraday trends in any way? It makes sense that trends will be stronger and that is good to hear at this time

It may give better trends in intraday as only serious and well capitalised traders will trade....it will give less of stray moves and noise.Traders initially may feel the pinch but it will be good for them in the long run.

ST

 

[timepass]

retail traders will have to trade with more responsibility now.

Smart_trade

I wasn't able to open that web page of the circular, but does it say anything about leverage ?

The exchanges may neutralize this move by increasing the leverage, as in the CDS segment

The one thing the government can't afford is reduction in the volumes. Nowadays the average volume tends to be about 3 lakh crores per day. That is a serious revenue stream for the government. Increasing the leverage will be the workaround needed to keep that figure and take it further up.

e.g. the lot size for NF may increase to 60, but NSE may ask for only 5% for the contract instead of the present 10%.

 

[Somatung]

SEBI has issued a circular so now stock exchanges have to comply.

This move will affect the liquidity but it may give more trending moves in the market.We have to gear up to trade in the new environment.

Index derivatives will have lot size in nearest increment of 5 so for Nifty at 8500 it will be 60 Nifty lot size...so traders will have to be prepared for trading 60 nifty min at a time.This move will be bad for new guys who trade in a single lot.

Small traders can now shift to buying of options as it will need lower margins but the profit/loss will be bigger....for min 2 lot traders it wont make much of a difference.Option buyers have to buy only in strong trends and liquidate when the trend goes sideways.

Discount brokers may be affected initially but traders will get used to trading 60 NF at a time....retail traders will have to trade with more responsibility now.

Smart_trade

I think it is an incredible good move from your SEBI to announce this. It will stop small financed people in your country to follow and even start to take too much risk with trading, as many did in the past by following people who posted like: I have read a few books on TA and now I am since then the king of trading. No need to mention any people who posted even like that in the last few day know with only DD.

So if the rules will now come into play like that, people will care much more about what they may or may better not try in trading, as the amount of money who can be lost or is on the table is getting higher and higher. With this the risked is set higher and that is fine in most, but not in all cases.

It will have no affect to the whole market in any way, as it will be absorbed by the bigger players like in any other market.

If there should be a more advanced change in your SEBI system, then they should change there way of margins, as this would help all like small retailers and even big players. But that seems not to be a topic to them.

 

[timepass]

I think it is an incredible good move from your SEBI to announce this. It will stop small financed people in your country to follow and even start to take too much risk with trading, as many did in the past by following people who posted like: I have read a few books on TA and now I am since then the king of trading. No need to mention any people who posted even like that in the last few day know with only DD.

So if the rules will now come into play like that, people will care much more about what they may or may better not try in trading, as the amount of money who can be lost or is on the table is getting higher and higher. With this the risked is set higher and that is fine in most, but not in all cases.

It will have no affect to the whole market in any way, as it will be absorbed by the bigger players like in any other market.

If there should be a more advanced change in your SEBI system, then they should change there way of margins, as this would help all like small retailers and even big players. But that seems not to be a topic to them.

Early days yet, Dan. Read this post of mine.

I wasn't able to open that web page of the circular, but does it say anything about leverage ?

The exchanges may neutralize this move by increasing the leverage, as in the CDS segment

The one thing the government can't afford is reduction in the volumes. Nowadays the average volume tends to be about 3 lakh crores per day. That is a serious revenue stream for the government. Increasing the leverage will be the workaround needed to keep that figure and take it further up.

e.g. the lot size for NF may increase to 60, but NSE may ask for only 5% for the contract instead of the present 10%.

 

[Smart_trade]

I wasn't able to open that web page of the circular, but does it say anything about leverage ?

The exchanges may neutralize this move by increasing the leverage, as in the CDS segment

The one thing the government can't afford is reduction in the volumes. Nowadays the average volume tends to be about 3 lakh crores per day. That is a serious revenue stream for the government. Increasing the leverage will be the workaround needed to keep that figure and take it further up.

It does not say anything about leverage as leverage comes in Risk Management System for exchanges and participants like brokers...I dont think stock exchanges will dare to increase leverage and frustrate SEBI's move of keeping small traders out of derivatives.

Smart_trade

 

[Somatung]

Early days yet, Dan. Read this post of mine.

I see, but I mean: Hedge trades / option strategy trades and so on.

 

[timepass]

It does not say anything about leverage as leverage comes in Risk Management System for exchanges and participants like brokers...I dont think stock exchanges will dare to increase leverage and frustrate SEBI's move of keeping small traders out of derivatives.

Smart_trade

If you see the recent changes in the lot sizes, you will find that a lot of contracts are still under the 2 lakhs as envisaged in the original concept of F&O in NSE, even after lot size rejig. More contracts are being added to this segment continuously (I think it is 271 scrips now). NSE clearly is in favor of an expanding F&O segment. I think that this move is more of a fight between BSE F&O and NSE F&O, rather than big / small brokers.

 

[timepass]

I see, but I mean: Hedge trades / option strategy trades and so on.

Yes, I do hope that this opens the doors for more option strategies, specially regarding selling the options which, at present, requires as much margin as the futures.

 

[eku]

Current margin is 16k per lot overnight,and for intra its 7k.

IF the contract size increase to 5L then the overnight margin will be 45k and for intra it'll be around 22k.

IF the contract size increase to 10L then the overnight margin will be 80k and for intra it'll be around 47k.

I'm a 1 lot(50NF) trader and it looks like it'll affect me.Its like playing on a margin amount only.

This mandate only for NF or all the derivative segments?(Tatasteel Fut etc)

 

[amitrandive]

Amit bro let us go to some other market then how is the commodities market?

If they want to manipulate they can do this in every segment and every market.